Ian Hadassin, the CEO of the Jewellers Association of Australia, discusses his first 12 months in the industry’s top job.
What are your biggest achievements in your first 12 months as CEO?
I believe my appointment has brought a wind of change through the JAA. Because of my previous experience both in the industry and the Association I have been able to quickly ascertain what the industry’s main problems are and am now in the process of trying to address them.
When I got here there were a lot of fences to mend and I think I have mended most of them – for example we’re now working closely with other industry associations.
However, I think that much of what I have put in motion in my first 12 months will be borne out in the next 12 months.
What have been your biggest setbacks in the same period?
We have been unable to persuade most of the large retail jewellery chain stores to join the JAA and hence abide by our new Code of Conduct. Also I had hoped to launch our new website in December 2007 but it looks like March 2008 is more realistic.
What motivates you in your role?
I am motivated purely by what is good for the jewellery industry rather than what’s good for me, my directors or any particularly industry area or participant. I take the view that, although not every decision we make is going to be popular, we’re more likely to make the right decisions if we act in the interests of the industry as a whole.
What are your plans for the immediate future of the JAA?
The main plans for the next two years are to bring out the new Code of Practice and to make sure all our members strictly abide by it. Basically I want to make it clear to our membership that people who don’t abide by the Code have no place in the JAA. Once we feel we have done that we will go out and advertise to the public that if they want to deal with a jeweller they can trust they should go into a JAA member’s store. At the moment I don’t believe I could say that with conviction.
Do you think those goals are achievable in the short-term?
The goals are not only achievable but are essential for the long term viability of the industry. It really is time for our industry to get serious in regards to ethics and honesty as consumers need to be able to trust a jeweller in the same way that they trust their dentist.
What is your longer term vision for the JAA and jewellery industry?
I would like to see the JAA representing 80 percent of the industry; providing high quality educational courses; and strongly promoting jewellery as an item of desire, emotion and design.
I would like to see jewellery retailers have access to much better educational opportunities. The product we sell is technical and if you want to sell a product with confidence you’ve got to know what you’re talking about. Therefore one of our goals for this year is to introduce some quality technical courses for jewellery retail staff.
I would also like to see jewellery promoted as a desirable item due to its design or originality rather than price. Unfortunately, apart from at the high end of the market, most jewellery in Australia is sold with a price focus and that’s a real pity because jewellery is, and should be, an emotional item that people buy for special occasions and for special reasons.
I believe that if we don’t move away from the price-focused path then the jewellery industry is never going exhibit strong and profitable growth.
Why do you think JAA membership is so low (around 25-30 percent of the industry)?
I think the membership has always been pretty low compared to other industry bodies because in the past the JAA has not delivered what members are really looking for.
How do you plan to increase it?
By developing a public image for the brand ‘JAA’ It’s really important for JAA membership to have recognition and value in consumers’ eyes and we need good PR and advertising to achieve that outcome. We are unable to finance that without increasing our membership and we can’t increase the membership until we’ve increased our PR and advertising. So the problem for the JAA is what comes first, the PR and advertising or increased membership?
We’ve decided we’re going to have to take the plunge and start promoting the JAA to consumers and trust that jewellers will come aboard when they realise that the JAA is serious about PR.
Has your practical experience in the jewellery industry helped you in your role as CEO?
It’s helped enormously. I would think that any CEO coming into our industry would have to go through a huge learning curve to understand it thoroughly, but due to my own experience as a jewellery manufacturer and retailer I have been able to identify the industry’s problems and opportunities right from the beginning and no one has been able to pull the wool over my eyes.
Do you think jewellery retailing is more difficult today than 20 years ago?
Retailing is without a doubt much more difficult today. In the last 10 or 15 years turnover for jewellery retailers has hardly moved. The total jewellery market size has grown but the number of new stores has expanded at an even greater rate.
What do you think are the biggest challenges facing jewellery retailers now?
Store rents and the pressures on margins from too much competition,
Is the JAA working to help solve these problems?
Unfortunately at this stage there is very little the JAA can do to help with either problem.
In regard to rents, all we can do is advise our members that, if they decide to open store in a shopping centre, they really need to take a five year view of their business and be prepared to move out in five years. Otherwise they are totally at the mercy of the landlord. If they’re not prepared to walk away at the end of five years they’ll have to accept whatever rent rise is imposed by the landlord.
In regard to pressures on margins there really is nothing the JAA can do – the marketplace is the marketplace. All I can suggest is that retailers try to gain a competitive edge by positioning themselves as different from the rest of the market. People are happy to pay double the price of an engagement ring at Tiffany’s for one reason only – branding.
In March 1994 you oversaw the launch of the current Code of Conduct and are now overseeing the introduction of a new Code. Why is a new code necessary?
The 1994 Code of Conduct (which was drawn up in conjunction with the ACCC) came to be seen as ineffective by the industry for a variety of reasons including a lack of transparency. The ACCC then brought out new industry guidelines. Unfortunately the guidelines gave retailers even less certainty than they had before .The JAA is currently working with the ACCC to bring out a new Industry Code of Practice that reflects industry best standards.
The new Code of Conduct will addresses the most important issues facing the jewellery industry today, including false and misleading advertising, misuse of valuations, lack of information on sale dockets and lack of diamond grading certificates.
Do you think that JAA members adhere to the current Code of Conduct?
I think the vast majority of retailers in Australia are honest but unfortunately there are a small number that behave unethically and cause problems with public perception for the whole industry.
What are the most common complaints again jewellery retailers?
We get around 15 calls are a week from consumers concerning jewellery that is not made properly (eg stones falling out), unrealistic valuations, lack of information on store paperwork resulting in arguments between retailer and consumer as to exactly what was sold etc.
How does JAA handle such complaints?
Most of the complaints are resolved over the phone on the same day although a small number of cases end up with a Consumer Affairs hearing.
How has the Kimberley Process (which cleaned up the international ‘blood diamond’ trade) impacted on the Australian jewellery industry?
The blood diamond trade was never an issue with consumers. The industry did a good job cleaning up the trade by putting the Kimberley Process in place but it was a non-event in the eyes of consumers. Retailers were prepared and had brochures to give out when the movie Blood Diamond was released but very few people came in looking for “conflict-free diamonds”.
What is the JAA doing about jewellery “sweatshops” using child/slave labour?
We encourage our members not to buy from factories which use child/slave labour or don’t have proper occupational health and safety standards. However, it does not appear to be a major issue for consumers at the moment as most people just want to pay the best prices for their jewellery and don’t really care where it comes from. That’s the sad thing about it. I really believe people should have a think about where their jewellery has come from and the people who have helped create it. Buying decisions shouldn’t just be based on price alone.
We advise our retailers to ask manufacturers more questions – it is their responsibility to find out. Retailers can ask manufactures to make a formal declaration about their occupational health and safety standards on their invoices in the same way that they make a statement about the Kimberley Process. They can ask for a simple declaration like “We do provide proper occupation health and safety standards for our staff” on each invoice.
How is the internet impacting on local jewellers?
Internet jewellery retailers are not popular with our “bricks and mortar” members but I don’t think online retailing is as big a threat to our jewellers as the industry gives it credit for. Internet jewellery sales might be growing at a bigger percentage than bricks and mortar sales but they are starting from a very low base. And I still think that most people like to see what they buy – particularly jewellery. Nonetheless due to members’ requests, the JAA will be holding a special meeting in March/April 2008 to decide whether to continue to allow Internet-only jewellery retailers to be members of the Association.
Why do you think there was so little response to your two full-page advertisements calling for industry feedback in the JAA magazine?
We ran an advertisement asking the industry to tell us what they thought the industry’s major problems were and what they thought we could do to help fix them but unfortunately there was only one response. I don’t know why there wasn’t a bigger response but can only guess that it’s due to there being so much complacency in the industry. I think it important for people in the jewellery industry to realize that the JAA is their Association and it is only as strong as the industry itself. It’s easy to stand on the sidelines and criticise but that’s not what the industry needs. People who have complaints should get involved and change it from the inside. The JAA is not a secret society – anyone can join and make their mark.